Effective Strategy-Making in Multinational Subsidiaries

We outline commonalities between studies of subsidiary decentralization and autonomous strategy-making in the international business and strategic management fields. This suggests that corporate headquarters should engage in strategy-making processes that provide a combination of formal direction for global efficiencies and autonomy for effective local responses. Strategic guidance from headquarters frames subsidiary decisions in line with corporate priorities and distributed decision power coupled with informal exchange of information facilitates strategic responses in tune with local market requirements. We identify some important nuances in the integration-responsiveness conundrum supported by an empirical study of 351 multinational subsidiaries. We discuss the implications for multinational strategy practice and suggest future research venues to investigate strategy-making in multinational firms.